crowdfunding

There are few things more frustrating that having a killer idea, a few talented souls willing to work on the idea with you, but not the kind of money you need to really get it off the ground. While there are many funding options available, some start up entrepreneurs will find their best option is crowdfunding, through which members of the public can contribute to your business either through goodwill or because they will get something in return.

Deciding It’s Right For You

While fundraising has helped many projects get off the ground or grow to the next level, it’s not a right fit for everyone. For starters, a fundraising campaign requires a lot of time and energy, and it might well be that you’d be better spending the same time and energy elsewhere. Equally, not all ideas are right for this type of money raising, so make sure you have a viable, well fleshed out idea before you commit to it. Few things look sadder than a crowdfunding campaign that receives few contributors and dies far away from its end goal.

Find the Right Crowdfunding Website

There’s not just one crowdfunding website, there are many. These sites are divided into three categories: those that are reward based, which ask for donations from individual contributors in return for a favor (say, an invite to the launch party for small donations, a year’s worth of goods for the big spenders); then there are sites that connect small businesses with wealthy investors, who can provide large sums of cash that’s to be repaid when the business is doing well. Finally, there’s the equity based crowdfunding options, whereby you can receive sums of money in return for a stake in your company. All of these methods have pros and cons, but generally most startups will be looking at the first type of crowdfunding site.

The Art of Storytelling

The most important aspect of a crowdfunding campaign is the story you tell to potential investors. Indeed, most of your initial time and capital will go into weaving the story for the public to buy in to. That means having a solid, professional look, with an idea that’s well thought out and backed by data. It means having a stellar, professional promotional video, made by experts such as Crews Control, that tells the audience exactly who you are and what you’re trying to achieve. Essentially, it’s about starting as you mean to go on – and a big part of that is making it look like you’re a million dollar company even if you’re just trying to get off the ground.

Engaging With Your Donors

The process isn’t just about getting money from the public and saying goodbye. The people who give you money are your core customer base, and with their help you can build a momentum that you can take into wider world as you grow. Stay in contact with the people who have given money, updating them on your progress as you go.

Ultimately, the key to a successful campaign is treating it as your primary project for its duration, not something that will bring in some extra cash. Good luck!

In just two short months an idea I’ve had for over almost three years will be coming to life at Skyway Studios here in Nashville, as a new spin on helping startups raise capital in a single evening is born via The Crowdfunding Pitch Show LIVE event.

For those of you that know me, last year I started hosting the Crowdfunding Pitch Show on Supertalk 99.7. The goal is to offer a way for entrepreneurs currently trying to raise capital via crowdfunding to pitch their ideas to the city and ask for financial backing.

A big part of why I started the show was creating a marketing mechanism for what this event is meant to accomplish; engage an audience, conduct market research, raise capital, and have a fun time doing it.

What Is The Crowdfunding Pitch Show LIVE

The Crowdfunding Pitch Show LIVE will be an opportunity for Tennessee entrepreneurs to raise capital in a single evening without having to give up equity, and the audience will decide who wins.

10 startups from around Tennessee have been selected to compete (Will be announced soon), and have 4 minutes to present their company. A panel of experts ranging from angel investors to small business owners will ask questions following the pitch, but will not be responsible for determining the winner.

The Crowd Decides The Winner

Following all the contestant pitches, the crowd will be asked to vote via mobile app on which company they like the best on the following factors:

Presentation

Business concept validity

Personal interest in product or service

All Ticket Sales Go To The Winner

The votes will be averaged, and whichever company receives the highest number of votes will be declared the winner, and receive capital generated from ticket sales.

As a member of the crowd, not only do you get to help decide who wins, your money goes directly to the winning startup.

Post Pitch Entertainment

Following the contest local bands will be performing, as drinks and cocktails are served. We will be able to enjoy a two great bands that are currently on tour around the country, Medic & Paper Lights, and have the opportunity to network with a broad range of people from around the state.

Why Come & What’s The Cost?

Whether you want to help a startup raise capital, just network, or are looking meet investors from around the country, The Crowdfunding Pitch Show LIVE is all about helping new startups grow, all while having a fun evening!

San Francisco angel investor of the year Manny Fernandez explains new things happening in the world of equity crowdfunding, why he founded Dreamfunded, and even offers to help startup founders with resources they need to raise capital!

Listen to the podcast then checkout DreamFunded.Com to learn more about new ways to raise capital!

In this action packed episode, San Francisco angel investor Manny Fernandez talks equity crowdfunding & the JOBS Act, then Oscar Pedroso pitches Thimble, and amazing new way to learn about robotics, software and hardware! Next we have amazing artist Jessica Martindale pitch her new album!

Crowdfunding has become a popular way to secure funding for projects in a range of industries. If you can’t obtain money from other sources, or don’t like the idea of them, crowdfunding could be the right route for you. However, not just anyone can launch a campaign and find the success they’re looking for. If you don’t get the attention you need, you won’t reach your target. Most crowdfunding sites work on the principle that you only get the money if you raise everything you need. So bringing in as many donations as possible is essential if you want to see any money at all. Follow these instructions to increase your chances of raising your funds.

Choose the Right Site

There are now many crowdfunding websites available for you to choose from. Some are suitable for just about any project, but there are also more specialized sites. You can find crowdfunding websites that are just for charitable causes. Some are intended for musicians, authors or other creative people. You can even find crowdfunding sites to help you raise the funding you need for a legal case. Even the sites that seem similar can have some subtle but important differences. Before you create your campaign, be sure to look at your options and decide which site is best for you.

Putting Together Your Page

Whichever website you choose to use, you’ll have to create a page for your campaign. This is your chance to convince people to donate their money to you. It’s also where you can keep people updated on the progress of your campaign and your project. You will probably have a space where you can upload a video and some photos. Take the opportunity to make yourself look professional, explain what your project is and why people should invest in it. You might create a video showing off your product prototype. Or you could record yourself talking about what your aims are. Write a description too so that people can read about what you’re doing.

Offering Rewards

Many crowdfunding sites work on the idea that people get something in return for their contribution. They like it if they receive something right away. You might have some promotional products lined up to send out to people who donate. There are other ways you can reward people too that might happen later on. For example, you might give them a producer’s credit in the web series you make. You should grade your rewards at different levels, depending on how much people give.

Spreading the Word

If you want to have any hope of reaching your goal, you have to tell people about your campaign. Crowdfunding works best when you already have a solid base of people you can market to. You can share your campaign page on social media and send it out to your email list. Otherwise, you’ll have to put in a lot of work to attract the right attention.

You have to put work into promoting your crowdfunding campaign if you want it to be successful. Don’t expect just to put it up and leave it to collect donations.

This week we had Vincent Bradley from Flashfunders come on the show to talk about equity crowdfunding and it’s impact on traditional investment. Then were joined by Gabe Blanchet founder of GroveLabs.IO to talk about their invention, the Grove Ecosystem. An amazing way to turn your house into a self-contained ecosystem to grow your own food!

Next we had founder of Kickshark, Jack Campbell on to talk about their latest campaign the Kanga Hoodie, a great new spin on the hoodie concept! You can even put your laptop into your hoodie pockets. Fantastic new invention!

I think it’s safe to say that crowdfunding is here to stay, and there is no sign of it slowing down.

In the last 5 years, the capital raised from crowdfunding has exploded from $1.5 billion to a projected $34.4 BILLION in 2015. WOW! In 2014 “only” $48 billion was raised from traditional capital. So at the rate crowdfunding is growing, NEXT year there will be more money raised via the crowd than traditional investment.

As I work with so many entrepreneurs trying to start new companies, raise capital for an invention, or just expand their company to the next level, the same problem stands in their way. Raising capital.

The Problem

Raising capital is one of the most complicated aspects of starting a company. Until the rise of crowdfunding, as an entrepreneur you were pretty much limited to friends and family, and let’s face reality, most of us don’t have friends or family with piles of money to give us, or you have to convince big time investors you have an awesome idea.

While there is a lot of traditional investor capital out there, investors are looking for massive return on their investments, justifiably so, and let’s face it, most small business ideas don’t do more than half a million a year in revenue, let alone that much in profit. So if you need a $100k to get your business off the ground, and the investor wants a minimum of 5x in ROI (return on investment), it’s just not reasonable for them to invest.

What Sparked The Idea

This sparked the idea of having a radio show to allow startup founders to directly pitch our city, and not just be limited to being covered by journalists or having the money available to run advertising campaigns.

As I was deciding to pull the trigger on the show, I started telling different businessmen about the idea and was shocked at how many of them didn’t know what crowdfunding was, let alone had ever backed a campaign.

These are extremely successful businessmen, well educated, even tech savvy. But had no idea how crowdfunding works, or what the benefits are to backers and founders. As I explained crowdfunding to them, they all were immediately intrigued, and within a week I was hearing all about startups they were backing and how “cool this crowdfunding stuff” is.

The responses I got from a prime demographic for backing startups – successful business owners, disposable income, risk takers – but who are unaware of crowdfunding indicates to me that an effort needs to be made to bring awareness of this modern method of raising capital directly to them. Not expect them to come to it.

So many of us in the world of entrepreneurship are so obsessed with the latest and greatest, that we are completely ignoring one of the best ways to share a message with America, and that’s radio. Whether in your car on the way to work, listening to the podcast version at the gym or live streaming on your phone. The options are endless.

The Purpose

What I’ve set out to accomplish with this show is simple. Test the concept here in Nashville, gain traction, then expand in to multiple cities. Crowdfunding is a numbers game, and it requires getting your idea in front of enough people.

If this concept is able to be expanded, then a “new” method can be utilized to help startups rapidly raise $50k, $60k, $100k+, while also creating a systematic way see what ideas are good, which ones need work, and which ones might not be a good idea to pursue.

We have an opportunity to impact our economy in a creative way, and I hope this idea resonates with you. With the help of Pilgrim Consulting and The Angel Capital Group, I have most of my hard cost covered, and am personally funding the rest. If you’re interested in helping me expand this concept I’d love to hear from you.

The show launched on October 10th, and airs live on SuperTalk 99.7 WTN on Saturdays from 5-6PM. This week we’ll have the first two episodes available to listen to via podcast on SeriousStartups.Com